1 - Plantwide and Departmental Predetermined Overhead Rates; Job Costs - Delph Company uses a job-order costing system with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that 55,000 machine-hours would be required for the period's estimated level of production. It also estimated $960,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $4.00 per machine-hour. Because Delph has two manufacturing departments-Molding and Fabrication-it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following information to enable calculating departmental overhead rates: Molding Fabrication Total Machine-hours 22,000 33,000 55,000 Fixed manufacturing overhead cost $740,000 $220,000 $960,000 During the year, the company had no beginning or ending inventories and it started, completed, and sold only two jobs-Job D-70 and Job C-200. It provided the following information related to those two jobs: Job D-70 Molding Direct materials cost $370,000 Fabrication $ 320,000 Total $690,000 Direct labor cost $240,000 $160,000 $400,000 Machine-hours 13,000 9,000 22,000 Job C-200 Molding Fabrication Total Direct materials cost $300,000 $220,000 $520,000 Direct labor cost $160,000 $240,000 $400,000 9,000 24,000 33,000 Machine-hours Delph had no underapplied or overapplied manufacturing overhead during the year. Required: 1. Assume Delph uses plantwide predetermined overhead rates based on machine-hours. a. b. Compute the plantwide predetermined overhead rate. Compute the total manufacturing cost assigned to Job D-70 and Job C-200. C. d. If Delph establishes bid prices that are 150% of total manufacturing costs, what bid prices would it have established for Job D-70 and Job C-200? What is Delph's cost of goods sold for the year? Assume Delph uses departmental predetermined overhead rates based on machine-hours. Compute the departmental predetermined overhead rates. Compute the total manufacturing cost assigned to Job D-70 and Job C-200. If Delph establishes bid prices that are 150% of total manufacturing cost, what bid prices would it have established for Job D-70 and Job C-200? 2. a. b. C. d. What is Delph's cost of goods sold for the year? PROBLEM 2 - Job-Order Costing for a Service Company - Speedy Auto Repairs uses a job-order costing system. The company's direct materials consist of replacement parts installed in customer vehicles, and its direct labor consists of the mechanics' hourly wages. Speedy's overhead costs include various items, such as the shop manager's salary, depreciation of equipment, utilities, insurance, and magazine subscriptions and refreshments for the waiting room. The company applies all of its overhead costs to jobs based on direct labor-hours. At the beginning of the year, it made the following estimates: + Direct labor-hours required to support estimated output Fixed overhead cost Variable overhead cost per direct labor-hour Required: 1. Compute the predetermined overhead rate. 2. 3. 24,000 $288,000 $ 1.00 During the year, Mr. Wilkes brought in his vehicle to replace his brakes, spark plugs, and tires. The following information was available with respect to his job: Direct materials Direct labor cost $ 615 $208 Direct labor-hours used 9 Compute Mr. Wilkes' total job cost. If Speedy establishes its selling prices using a markup percentage of 50% of its total job cost, then how much would it have charged Mr. Wilkes